Expert answer:Operations Management 8
Solved by verified expert:What trade-offs are involved in deciding to have a single large, centrally located facility instead of several smaller, dispersed facilities? Who needs to be involved in this decision? And, how can technology facilitate an optimal decision in the present circumstance? Visit the web and identify an organization that made similar decisions. How did the organization make their decision?Embed course material concepts, principles, and theories, which require supporting citations along with at least one scholarly, peer-reviewed reference in supporting your answer unless the discussion calls for more. 1 page attached some other students answers
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Deciding on the location is an important step that may affect the company’s strategy
positively or negatively. Choosing the right location will increase the revenue and support the
firm’s strategy. For example, if the company follows a low-cost strategy, it must access to
regions that have low materials’ and workers’ costs. Thus, this article will discuss the trade-offs
involved in deciding to have a single large centrally located facility instead of smaller dispersed
facilities and clarify who needs to be involved in this decision. It will also discuss how
technology facilitates an optimal decision in the present circumstance. Moreover, it will give
examples of organizations that made similar decisions and explain how they make these
decisions.
The trade-offs involved in deciding to have a single large centrally located facility instead
of smaller dispersed facilities can be known by looking to the benefits of centralization strategy.
According to Pick (2015), centralization increases efficiency by allowing efficient use of
equipment capacity and efficient use of staff. The facility does not suffer from duplication as
happens in the decentralized organizations. Thus, it gains economies of scale. Moreover, the
high-level managers have the decision-making authority that offers a tighter control (Pick, 2015).
Having a tight control over the facility will help to decrease mistakes. Thus, the mangers of the
existing company are the ones who need to be involved in the decision of whether to have one
big facility or small scattered ones (Stevenson, 2014). They must weigh the benefits and the
costs and thus decide on the location.
Moreover, using technology can facilitate the best decision in the present circumstance.
For example, using geographic information systems (GIS) can help to decide on whether having
small scattered facilities can bring more benefits to the organization or not. This program allows
accessing to large data in various locations. It can show information about a specific area such
as population, incomes, ethnicity, density, age, traffic patterns, transportation resources, utilities,
recreational facilities, competitor locations, educational institutions, maps and images, shopping
centers, and crime statistics (Azzam, 2013). This information can be used by the evaluators to
weigh the benefits of being in a specific location.
However, there are many ways to make a decision regarding the location or whether to
centralize or decentralize. For example, according to Campbell, Kunisch, and Müller-Stewens
(2011), the CEO of the European equipment manufacturer was wondering whether he should
combine product management for the company’s two business units that are cutting and welding
or not. These units were operated largely independently of each other but shared the same brand.
Thus, he wanted to make a centralization decision. He decided on the centralization after making
the analysis that consists of three questions that are as follows: is it mandated? does it add
significant value? and are the risks low? The decision to centralize requires a yes to at least one
of three questions. The outcome of applying centralization in the European equipment
manufacturer was positive (Campbell, Kunisch, & Müller-Stewens, 2011). This company made a
successful decision by choosing to apply decentralization.
On the other hand, the Green Investment Bank (GIB) is an example of the company that
wants to decide on a location. The Government wanted to establish a new financial institution
that helps overcome market failures in the green infrastructure financing and to speed up
investment in the UK’s transition to a green economy. The main concern was to make sure that
the location of the GIB properly supports the government aim for the GIB. Thus, making
decision required assessing two criteria that are the ability of the GIB to sustain and recruit staff
with the necessary quality and expertise, and the GIB’s ability to engage effectively with the
transaction eco-system. The secretary of state for business, innovation, and skills (BIS) received
representations from Thirty-two suggested locations. The small review panel formed by the BIS
excluded the locations that were not applicable with the two criteria. The remainder were
subjected to a further critical assessment. Then, a weighted scoring system was applied to allow
relative effectiveness to be presented in numerical terms with a maximum possible score of two
hundred points. The outcome was a short list of the six strongest locations (BIS & ShEx, 2012).
Thus, the board could shorten the list of the locations. However, the final decision took into
account a qualitative assessment. The secretary of state decided that the headquarters of the GIB
should be in Edinburgh and that the GIB’s main project finance transaction team should be in
London (BIS & ShEx, 2012). This was an example of how the location may affect the
organization. Thus, making an analysis for each suggested locations is needed before making a
decision.
Finally, this article discussed the trade-offs involved in deciding to have a single large
centrally located facility instead of smaller dispersed facilities and mentioned who needs to be
involved in this decision. Also, it explained how technology facilitated an optimal decision in the
present circumstance. Moreover, it gave two examples of companies that made similar decisions
and explained how they made the decisions. Both of them conducted analysis to find out the best
choice. The first company decided on centralization while the other company decided on locating
its bank in Edinburgh and the primary project finance transaction team in London.
References
Azzam, T. (2013). Mapping data, geographic information systems. New Directions for
Evaluation, 2013(140), 69-84. doi:10.1002/ev.20074
BIS & ShEx. (2012). Green investment bank: Decision on location. Retrieved from
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/31782/12646-location-green-investment-bank-decision.pdf
Campbell, A., Kunisch, S., & Müller-Stewens, G. (2011). To centralize or not to centralize?
Retrieved from https://www.mckinsey.com/business-functions/organization/ourinsights/to-centralize-or-not-to-centralize
Pick, R. A. (2015). Shepherd or servant: Centralization and decentralization in information
technology governance. International Journal of Management & Information Systems
(IJMIS), 19(2), 61. doi:10.19030/ijmis.v19i2.9173
Stevenson, W. (2014). Operations management (12th ed.). New York, NY: McGraw-Hill Irwin
The concept of negotiation is one of the things we practice continuously. Therefore,
mastering this art is very important especially in the field of school administration as it uses this
skill to accomplish most of its work by virtue of its direct function in dealing with individuals in
and around the school community. As their characters reflect a good role model for future
generations whose composition is formulated. Types of negotiations: a) in terms of objectives:
negotiation for rapid settlement, negotiation to settle the situation, negotiating winnings for a
party, negotiating for influence on an invisible party, negotiating winnings for all b) in terms of
negotiating parties between groups.
Negotiation Skill: The Art of Persuasion: The skill of persuasion is vital to successfully
complete the negotiation process and persuasion can be described as complex mental behavior.
Because negotiation is sometimes called the art of persuasion. The skill of persuasion is based on
many qualitative skills, such as the ability to have good cognition, mental alertness,
attentiveness, comprehension, reasoning, flexibility, and verbal fluency. There are two
conditions to enjoy this skill together: A – Information: The smart negotiator is the one who
relies on scientific planning to solve problems and achieve goals and collect relevant information
and analyze it from all parties and develop a vision of possible solutions and provides proposals
that would contribute to create an atmosphere of cooperation. B – Training: is the tool that
contributes to the development of persuasion skills of the negotiator. It is not useful to develop a
curriculum and objectives to negotiate without the skills and behaviors of the art of negotiation
and we can develop these skills through intensive training with high efficiency. Civility in
dialogue: The tact in dialogue with others needs to have a range of talents and skills, including
inherited, such as skills and ability to persuade and the ability to use the appropriate words
influential and clear and concise. This requires knowledge and culture as well as not interrupting
the speaker and not criticizing him or minimizing the importance of his ideas, opinions and
proposals. It is also good to listen, to enjoy an open mind and to be able to understand others.
The tactfulness of the dialogue leaves the impression of the other party wanting to cooperate
with it, thus helping to build bridges of trust between the negotiating parties. Objectivity:
Negotiating necessities The negotiator’s commitment to objectivity so that the negotiator is
interested in the facts without affecting any personal effects so that the focus of the dialogue on
the subject and not on the people and the dialogue should be based on logical grounds and
mental evidence and justifications acceptable. Both parties consider themselves partners in the
pursuit of a fair and mutually beneficial agreement. (Wolf, Sander van Doorn, Leimar &
Weissing, 2007)
Multiple Alternatives: The skilled negotiator is the one who has the ability to provide the
greatest number of alternatives and the timing of their use. And the more options and alternatives
in the hands of the negotiator. Whenever it provides an opportunity to move and maneuver and
choose between solutions. A multi-option approach protects the negotiator himself from being
captive to a single solution or offer that can only be acted upon. The negotiator should not offer
options at once during the negotiation process. These options are pressure cards that constitute
bargaining power for the negotiator. In addition, trying to know the other party’s opinion about
the alternative before the issue is important, with the emphasis on not giving the other party an
opportunity to know about this alternative, bearing in mind that you must know that you have
other alternatives for your benefit can be resorted to: because the other negotiator if I think you
lack good alternatives that will weaken your negotiating position. The generation of the best
alternatives to a negotiated agreement requires three processes: the creation of a list of actions
that it envisages can be undertaken in the absence of agreement. Better ideas are more promising
than others and turned them into practical options. Choose an alternative that seems to be the
best. On the other hand, good knowledge of the alternatives of the other party makes you more
prepared for negotiations, especially if the bargaining position of the other party is more
powerful than you clearly. Possession of power: Negotiating from a position of strength is one of
the most important negotiating principles. The ability to use and employ this force is an art that
only skilled negotiators use. The definition of the concept of force, its elements, its components
and its sources is relative, depending on the nature of the subject and the field of negotiation.
Power can be the source of financial status, property, wealth, political and party ties, and social
relations. Adaptation trade-offs. (2015).
According to (Aktipis, Boddy, Gatenby, Brown & Maley, 2013). Giving information as
needed: The skilled negotiator is the one who can block the information he has and show it in
time. Disclosing important information to third parties, whatever it is, makes you at the mercy of
this party because it can be a salable and bargaining chip. Giving information to the minimum of
this necessity makes the other party anxious that they cannot get detailed and accurate
information about you at the time you can get information from them. Self-confidence and
others: self-confidence and other personal characteristics that must be enjoyed by the skilled
negotiator so that he can at least pave the way for fruitful results from the negotiation rounds.
Self-confidence and others can create a friendly atmosphere of cooperation and pave the way for
agreement in the light of the mechanism of finding solutions to the problems and differences on
the negotiating agenda. Trust is linked to credibility given that the credibility of the other party
comes through time and through sources of information whether it is related to past experiences
or previous negotiations and fulfillment of obligations to others. (Aktipis, Boddy, Gatenby,
Brown & Maley, 2013).
Reference
Adaptation trade-offs. (2015). Nature Climate Change, 5(11), 957.
doi:http://dx.doi.org.sdl.idm.oclc.org/10.1038/nclimate2853
Wolf, M., Sander van Doorn, G., Leimar, O., & Weissing, F. J. (2007). Life-history trade-offs favour the evolution of
animal personalities. Nature, 447(7144), 581-4. doi:http://dx.doi.org.sdl.idm.oclc.org/10.1038/nature05835
Aktipis, C. A., Boddy, A. M., Gatenby, R. A., Brown, J. S., & Maley, C. C. (2013). Life history trade-offs in cancer
evolution. Nature Reviews.Cancer, 13(12), 883-92. doi:http://dx.doi.org.sdl.idm.oclc.org/10.1038/nrc3606
Science; research data from INSEAD update understanding of social science (search before trade-offs are known).
(2015, Oct 02). Science Letter Retrieved from https://search-proquestcom.sdl.idm.oclc.org/docview/1715975566?accountid=142908
Decision making on facility locations plays a vital role and has a significant impact on a
firm’s ability to implement its organizational strategies and achieve its organizational goals
(Mahootchi et al., 2011). Organizations are usually settling with finding a number of good
locations to base the location decision on, rather than identifying the one best location
(Stevenson, 2012). This is due to the fact that the decision must be made on both a strategic level
and a tactical level. The strategic goal is to find the proper locations and the capabilities of each,
and the tactical objective focuses on determining the optimal processing and other factors such as
transportation (Mahootchi et al., 2011).
According to Stevenson (2012), there are two distribution models for a firm to decide
from with regards to location decisions, which are centralized and decentralized distributions.
Centralized distribution generally generates a tighter control but incurs higher transportation
costs, and decentralized distribution responds more efficiently to local needs. When considering
which model to adopt, there are a number of factors to consider. The risks, benefits, resource
allocation, customers and transportation are general factors that every organization must
deliberate. However, there are additional factors which are organization-oriented and depend on
where exactly the organization stands in the supply chain. Technology is one of the main factors
which facilitate location decision making. This is because technological advances provide
continuous communication and information sharing (Stevenson, 2012). A good location is
determined by tools, which have a qualitative and quantitative nature to them (Alam, Wali,
Hossain, & Wali, 2015). Decision making must involve the input of all of the organization’s
managers, as to examine the importance of each factor considered in the decision. However, only
senior manager officials, such as the chief executive officer (CEO), will finalize the decision
(Campbell, Kunisch, & Müller-Stewens, 2011).
McKinsey & Company is a global management consulting in New York which lately faced a
hard centralization decision. After considering the above named tradeoffs, top most executives decided
to centralize their decision. The CEO was the first to come up with those ideas and he had to manage
everything to make the centralization decision successful. The company used Decision support
system (DSS) and Artificial intelligence (AI) system. The combination of these two IT systems
helps in creating information via online analytical process to support the decision making tasks
that might need significant effort and analysis. In this case, technology played a great role on the
way the decision was made (Campbell et al 2011).
References
Alam, K. M., Wali, F. I., Hossain, S., & Wali, M. M. (2015). Use of multi-criteria decision
analysis for location decision: Developing a risk reaction spectrum. The Journal of
Developing Areas, 49(6), 505-516. doi:10.1353/jda.2015.0080
Campbell, A., Kunisch, S., & Müller-Stewens, G. (2011). To centralize or not to
centralize? McKinsey Quarterly, (3), 97-102.
Mahootchi, M., Fattahi, M., Khakbazan, E., Kotsireas, I., Melnik, R., & West, B. (2011).
Stochastic Multi-Commodity Facility Location Based on a New Scenario Generation
Technique. AIP Conference Proceedings, 1368(1), 225-228. doi:10.1063/1.3663500
Stevenson, W. (2012). Operations management (12th ed.). New York, NY: McGraw-Hill Irwin
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